The proposed system aims to develop a secure medical image encryption algorithm by combining chaotic map and cryptographic technique. In this paper, an innovative AFO (Arnold Cat Map, Fibonacci sequence and One Time Pad) algorithm for medical image encryption has been proposed. This AFO algorithm consists of four phases, in which diffusion, and confusion takes place two times. The pixels of the original (OI) and the key (KI) image are diffused by Arnold Cat Map first. Then the pixels of diffused images are confused with the help of Fibonacci sequence. Next, N unique random numbers are generated. Using these random numbers, the confused OI and KI image pixels are again permuted. The values of the resultant OI and KI pixels are pooled by utilizing the Vernam Cipher (also known as One Time Pad) in the final confusion phase. The quality of the reconstructed and an encrypted images are evaluated by some of the most widely used objective measures like MSE (Mean Square Error), PSNR (Peak Signal to Noise Ratio), AD (Average Difference), MD (Maximum Difference), MAE (Mean Absolute Error), (CC) Correlation Coefficient, IF (Image Fidelity), SSIM (Structural Similarity Index Metrics). Results of these measures commends that the proposed AFO encryption algorithm is suitable for secure medical image transmission.